In March 2010, the U.S. Congress passed H.R. 3590, the Patient Protection and Affordable Care Act, and its “sister,” H.R. 4872, the Health Care and Education Reconciliation Act (“the acts”), causing a firestorm of controversy resulting in a challenge to their legality brought by 20 states. The United States Supreme Court has upheld the acts’ constitutionality, allowing them to move forward without question. The main provisions of H.R. 3590 and H.R. 4872 won’t take effect until 2014, when health insurance becomes mandatory for most people.
While making it possible for more people to have some form of health coverage and eliminating certain exclusions – such as the pre-existing condition clause – and extending coverage for dependent children to age 26, the long-term effects of the acts remain uncertain. Opponents argue that the cost of coverage will increase, the quality of health care will be degraded, and the country will move closer to fiscal insolvency. Proponents assert that health care costs will skyrocket without reform and the acts will reduce the nation’s deficit.
Another issue that still remains unclear is how Insurance Exchanges will work. According to the U.S. Department of Health & Human Services, “Affordable Insurance Exchanges are designed to make buying health coverage easier and more affordable. Starting in 2014, Exchanges will allow individuals and small businesses to compare health plans, get answers to questions, find out if they are eligible for tax credits for private insurance or health programs…and enroll in a health plan that meets their needs.” By January 2013, states are required to inform the federal government if they will be ready to operate an insurance exchange one year later. The acts create state-based Health Insurance Exchanges administered by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. However, states can also decide to opt out of implementing their own exchange and give up control to the federal government.
For Multiemployer Plans, the acts required the distribution of a Summary of Benefits Coverage (SBC) by September 23, 2012; W-2 reporting of the value of employer-sponsored coverage is required for 2012 W-2 forms that will be issued in January 2013. There are many other provisions that will affect Multiemployer plans and may have an effect on benefit strategies and collective bargaining in 2013 and beyond.
The acts are complex and will have far-reaching effects on businesses and individuals in the very near and long-term. Plan sponsors, fiduciaries and service providers should be sure that they are familiar with the acts and the provisions that will affect them and their clients.